Driving towards an online car service

The
changes in company car taxation, introduced in April 2002, have led to a raft
of new products and initiatives aimed at securing the survival of the company
car. While drivers used to be taxed on their business mileage, the emphasis now
is on how green their car is, and the reduction in CO2 emissions.

Manufacturers
have responded by producing cars that are more fuel-efficient and kinder to the
environment, while car leasing firms have broadened their range of products in
recognition of the new taxation regime.

One
of the effects of the changes has been the development of internet facilities
by vehicle leasing firms, to help individuals and companies steer a course
through the options now available to them. HR departments are now better able
to explore what different leasing firms have on offer, and their relative
costs.

“There’s
a lot more activity on the internet and demand for more and easier
communications methods,” says Spencer King, marketing manager at vehicle
leasing and management firm Velo.

In
the new tax environment, the most important question asked by car users is
whether it makes more sense for them to keep their company car, or ditch it in
favour of an ‘opt out’ scheme (where cash is offered in exchange for the
company car). For drivers of larger cars doing more business mileage, opting
out could be the better choice, but it can be very complex to work out.

Not
only do drivers need to consider their mileage, tax band and the car’s CO2
emissions, but also the costs of servicing, repairs, fuel and insurance, which
generally form part of the company car package.

This
is where the internet services have come into their own, with many leasing
companies offering a facility that will do the sums for you. On the Volvo Car
Finance site, for example (www.volvocars.cashorcar.co.uk), drivers are offered
a ‘what if’ scenario that calculates the costs of each option for drivers –
taking factors such as the business mileage, car model and tax band into consideration.

Data
is also provided by the Vehicle Certification Agency (VCA), which collects and
publishes indicative CO2, fuel consumption and other emissions data on new cars
(www.vca.gov.uk).

HR
can use these facilities to explore whether a particular company car would be
an attractive part of a remuneration package for an individual, or whether they
need to consider other schemes or different car models.

Online
facilities are also helping to streamline the administration of car fleets,
which has become more complex since the tax changes were introduced, as there
is now less standardisation in fleet use. Many companies will be offered their
own website to help manage their car fleets. Interleasing, for example, offers
a driver management system and driver database, which can be used by HR to keep
a list of the company’s drivers and details of their car plans.

Individual
sites are also being developed for company drivers, helping to ease
administration by storing certain information online, including details of the
driver’s policy and insurance. Instead of cumbersome paper-based systems,
drivers will log information about mileage, repairs and other regularly
required data online, and the site will provide information on how to book a
service, and so on.

What
we are seeing is only the first stage of internet use. In future, we can expect
leasing companies to offer much more integrated systems that will link the
website with the ‘back office’ administration function.

Andrew
Cope, managing director at fleet management services company Zenith, says: “We
are starting to move in this direction. For example, if a car needs to have new
tyres, the driver will be able to link into a repair shop web screen, confirm
the pricing and timing is right, and an electronic invoice for the repair will
be raised and sent directly into our system.”

In
time, such systems will also be applied to car purchasing. “The way we transact
with customers and suppliers will be very different two years down the line,”
he adds.

At
this stage, while there has been a definite increase in e-commerce in this
sector, the fact that much of the paperwork still requires a signature means
that company car administration won’t be moving completely away from paper-based
systems just yet.

Bob
Moore, Volvo sales development manager, says: “For credit applications and
ordering a car, very little is done online – we will take the details and get a
local dealership to contact the company directly.”

And
despite the changes, the telephone still remains an important part of the
equation. Answers to a large number of questions can be delivered over the web,
but people still like to have ‘comfort chats’ on the phone.